Does a Partnership Get a 1099? Forms, Deadlines, and Penalties

Yes. If your business pays a partnership $600 or more during the year, you generally have to issue a Form 1099. The corporate exemption that lets you skip 1099s for payments to C corporations and S corporations does not extend to partnerships, and that is where most of the confusion around whether a partnership gets a 1099 begins.¹

Why the Corporate Exemption Doesn’t Cover Partnerships

The IRS exempts most payments to corporations from 1099 reporting. That exemption applies to C corporations, S corporations, and LLCs that have elected to be taxed as either.² Partnerships are specifically outside that exemption. The IRS general instructions say so directly, using the example of $600 or more paid to an architectural firm organized as a partnership.¹

Payers sometimes assume that because a partnership files its own return on Form 1065 and passes income through to partners on Schedule K-1, a 1099 would be redundant.³ It isn’t. The K-1 reports how the partnership divides its income among partners. The 1099 reports that you paid the partnership in the first place. The IRS uses both to cross-check, and skipping the 1099 leaves a hole in that trail.

The rule applies the same way to an LLC taxed as a partnership. If the vendor’s Form W-9 shows an LLC with a “P” tax classification, treat it as a partnership and issue a 1099 when the threshold is met.²

Which 1099 Form to Use

Which form you file depends on what the payment was for, not on the fact that the payee is a partnership. Two forms cover almost everything.

Use Form 1099-NEC for nonemployee compensation of $600 or more. If you hired a partnership to perform services — consulting, design work, IT support, subcontracting — the total goes on a 1099-NEC.⁴ Payments to attorneys for legal services go on 1099-NEC regardless of how the law firm is organized.²

Use Form 1099-MISC for other reportable categories. The common ones are rent of $600 or more, royalties of $10 or more, medical and healthcare payments of $600 or more, and gross proceeds paid to an attorney (such as settlement funds, as opposed to the attorney’s fee itself).⁴ The 1099-MISC also covers substitute payments in lieu of dividends or tax-exempt interest of $10 or more.²

When You Don’t Need to Send One

Two situations knock out the 1099 requirement even when the recipient is a partnership.

The first is payment method. If you paid the partnership by credit card, debit card, or a third-party network like PayPal or Venmo for Business, you do not file a 1099-NEC or 1099-MISC for that transaction. The payment processor is responsible for the reporting, and the IRS prohibits reporting the same transaction twice.⁵ The processor files Form 1099-K instead, under a threshold of $20,000 and more than 200 transactions after recent legislation restored the pre-2022 figures.⁶ Even if the partnership falls below that threshold and never receives a 1099-K, you still don’t file a 1099-NEC for card payments. The exemption follows the payment method, not whether the processor actually issues a form.

The second is distributions a partnership makes to its own partners. Those are not 1099 payments; they appear on Schedule K-1 (Form 1065).¹ This matters only if you’re the partnership paying out, not the client paying in.

Confirming the Vendor Is a Partnership

Don’t guess at a vendor’s entity type. Collect a Form W-9 before you make the first payment.⁷ On it, the vendor checks a box for their entity type. If the box reads “Partnership,” you owe a 1099 on qualifying payments. If it reads “Limited liability company” with “P” on the classification line, same answer. An LLC that marks “C” or “S” is treated like a corporation, and the general exemption applies.

The W-9 also gives you the Taxpayer Identification Number you need to complete the 1099. The IRS runs a TIN Matching service that lets registered payers verify a name-and-TIN combination before filing, which catches errors that would otherwise come back months later as IRS notices.⁸

If a partnership refuses to return a W-9 or supplies a wrong TIN, you’re required to start backup withholding at 24% on future payments and send the withheld amount to the IRS on Form 945.⁹ You must also issue a 1099-NEC for anyone from whom you’ve backup-withheld, even if the total payments were below $600.⁴ Most vendors return the W-9 promptly once they understand the alternative.

Filing Deadlines

The 1099-NEC and 1099-MISC are not on the same schedule.

Form 1099-NEC has one deadline, January 31, for both the copy you furnish to the recipient and the copy you file with the IRS. Paper and electronic filers are on the same date.²

Form 1099-MISC recipient copies are due January 31 for most payment types, with February 15 applying to statements that report gross proceeds paid to attorneys or certain broker transactions. The IRS copy is due February 28 on paper and March 31 electronically.¹⁰

Businesses filing 10 or more information returns of any type in a year must file electronically.¹¹ The IRS runs a free portal called IRIS (Information Returns Intake System) that handles up to 100 returns at a time through manual entry or CSV upload.¹² Many states require their own copy as well; if you join the IRS Combined Federal/State Filing program, the IRS forwards 1099 data to participating state agencies automatically.¹³ States outside the program may need a separate filing, so check with your state revenue department.

Penalties for Skipping a 1099

Penalties are assessed per return and get worse the longer you wait. For returns due in 2026:¹⁴

Corrected within 30 days of the due date: $60 per return.
Corrected after 30 days but by August 1: $130 per return.
Corrected after August 1 or never filed: $340 per return.
Intentional disregard: $680 per return, or 10% of the amount that should have been reported, whichever is greater, with no annual cap.

The annual maximum is lower for small businesses (those averaging $5 million or less in gross receipts) than for larger ones at each tier. The intentional disregard penalty has no cap at any size.¹⁴

These penalties apply separately to the copy filed with the IRS and the copy furnished to the recipient. Missing both for the same payee means two penalties, not one. A business that pays several partnerships through the year can see a compliance gap compound quickly.

The IRS can waive the penalty for reasonable cause if you show you acted responsibly before and after the failure and that significant mitigating factors or events outside your control contributed to it.¹⁵ Filing late is always better than not filing: the dollar penalty is smaller and the good-faith effort weighs in your favor if you later ask for relief.

1
Internal Revenue Service. General Instructions for Certain Information Returns
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Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
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Internal Revenue Service. Instructions for Form 1065 – US Return of Partnership Income
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Internal Revenue Service. Am I Required to File a Form 1099 or Other Information Return
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Internal Revenue Service. Form 1099-K FAQs: Third Party Filers of Form 1099-K
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Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One Big Beautiful Bill
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Internal Revenue Service. About Form W-9, Request for Taxpayer Identification Number and Certification
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Internal Revenue Service. Taxpayer Identification Number (TIN) Matching
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Internal Revenue Service. Instructions for the Requester of Form W-9
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Internal Revenue Service. 2026 Publication 1099 General Instructions for Certain Information Returns
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Internal Revenue Service. E-file Information Returns
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Internal Revenue Service. E-file Information Returns With IRIS
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Internal Revenue Service. Combined Federal/State Filing (CFSF) Program State Coordinator Information FAQs
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Internal Revenue Service. Information Return Penalties
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Internal Revenue Service. Penalty Relief for Reasonable Cause